A retail store increased the Sales Revenue account for the sales price and the amount of sales tax on sales.If the sales tax rate is 5% and the total receipts amounted to $630000 what is the amount of the sales taxes owed to the taxing agency?

Question

Quizplus · Accepted Answer

The sales tax is 5% of the total sales amount before tax. If the total receipts are $630,000, this includes both the sales and the sales tax. Let X be the sales amount before tax. Then, X + 0.05X = $630,000. Solving for X gives X = $600,000. The sales tax is 5% of $600,000, which is $30,000.

A Retail Store Increased the Sales Revenue Account for the Sales